The current tensions between the United States and India over trade have reached a critical juncture, marked by open frustration from top US officials and the imposition of substantial tariffs on Indian exports.

US Treasury Secretary Scott Bessent publicly criticised India for what he termed “slow-rolling” the ongoing talks for a Free Trade Agreement (FTA), expressing that “the whole trade team has been frustrated with them.”

These remarks came immediately after US President Donald Trump announced a sweeping 25% tariff on all Indian goods, effective August 1, 2025, and an additional, yet unspecified, penalty targeting India’s continued purchase of Russian oil and military equipment.

Bessent’s comments specifically called out India’s significant role in global energy markets as a “large buyer of sanctioned Russian oil,” which is subsequently refined and resold, stating bluntly that “they have not been a great global actor.”

He emphasised longstanding US grievances regarding high Indian tariffs, trade imbalances, and what the Trump administration sees as India’s lack of alignment with US national and economic security interests.

President Trump, addressing the press in Washington, reinforced his demand that India significantly lower its tariffs, labelling India as “one of the highest tariff nations in the world,” with some rates cited as exceeding 100-175%.

Trump put the tariff onus squarely on India’s negotiating stance, especially regarding access to its agricultural and dairy markets, and pointed to India’s ongoing membership in the BRICS bloc, which he described as “Anti-United States” and an attack on the US dollar.

The timeline for these developments began in April 2025, when Trump signed an executive order mandating reciprocal tariffs of 10-50% against various countries, including India. Initially, a 10% baseline tariff was imposed, with a 26% total tariff announced for India, but deadlines were extended during negotiations.

Following protracted talks, the full 25% tariff rate was fixed for August 1, 2025. The White House emphasised that this decision was driven by the US trade deficit with India, India’s protectionist policies, and their perceived insufficient progress in bilateral negotiations.

On India's side, Commerce and Industry Minister Piyush Goyal told Parliament that the government is “studying the implications” of the US action and will take every step necessary to safeguard the country’s national interest.

He reiterated India’s unwavering stance on protecting its agricultural and dairy sectors—critical areas of livelihood for millions—and insisted that trade deals cannot be rushed by artificial deadlines. Goyal also highlighted India’s economic transformation over the past decade, noting its rise from the “Fragile Five” to one of the world’s five largest—and fastest-growing—economies.

Despite these tensions, India and the US have continued bilateral negotiations. Talks for a “just, balanced, and mutually beneficial Bilateral Trade Agreement” began in March 2025, with the first tranche targeted for completion by October-November 2025.

However, agriculture and dairy remain key sticking points for India, while the US seeks greater market access. The next official round of talks is scheduled for August 25, 2025, indicating that channels of dialogue remain open, even amidst tariff escalations and political rhetoric.

In summary, the current US-India trade dispute is characterised by:

Significant US frustration at the pace of negotiations, particularly over India’s protection of its domestic markets and energy ties to Russia.

A new 25% US tariff on all Indian goods, with additional penalties linked to India’s Russian oil imports.

India’s stance of protecting core domestic sectors and studying the impact before responding, while aligning national actions with broader economic and strategic goals.

Ongoing diplomatic engagement, with both sides leaving room for compromise, despite high-profile disagreements and the threat of prolonged tariff regimes.

These developments underscore the complex nexus between trade diplomacy, domestic economic interests, and larger strategic considerations shaping the US-India relationship at this pivotal moment.

Based On ANI Report